Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
General Landlording & Rental Properties
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 9 years ago, 01/17/2016

User Stats

16
Posts
5
Votes
Bill Zepeda
Pro Member
  • Rental Property Investor
  • Brentwood, TN
5
Votes |
16
Posts

Rent-Increase Letter Suggestions...

Bill Zepeda
Pro Member
  • Rental Property Investor
  • Brentwood, TN
Posted

Hi All-

I'm about to conduct my first rent increase and I'm looking for suggestions on how to create a letter that is polite, yet accomplishes the task.  The tenants are good people but I want to stay reasonably close to market rent .  Does anyone have similar letter they could share?

Thanks in advance,

Bill

  • Bill Zepeda
  • User Stats

    1,023
    Posts
    390
    Votes
    Steven Gesis
    • Investor
    • Miami, FL
    390
    Votes |
    1,023
    Posts
    Steven Gesis
    • Investor
    • Miami, FL
    Replied
    Originally posted by @Bill Zepeda:

    Hi All-

    I'm about to conduct my first rent increase and I'm looking for suggestions on how to create a letter that is polite, yet accomplishes the task.  The tenants are good people but I want to stay reasonably close to market rent .  Does anyone have similar letter they could share?

    Thanks in advance,

    Bill

     Hi Bill,

    This is always a difficult subject to bring up to tenants. No one ever wants their rent to go up, that just doesn't make sense! Many times they don't understand why it has to change if the house is still the same. Some suggestions is to do it by meeting with them in person, but sometimes you might not have to the time to do that. One of the best ways to do it is to submit a letter with their lease renewal. Simply law it out in the letter what has changed, why it has changed, and let them contact you with any questions. It doesn't need to be a very wordy letter. Most tenants understand the market changes.

    Sometimes tenants won't take it well, but mostly they understand. Please let me know if you have any questions about this.

    User Stats

    272
    Posts
    394
    Votes
    Jeff Pollack
    • Real Estate Investor
    • Redwood City, CA
    394
    Votes |
    272
    Posts
    Jeff Pollack
    • Real Estate Investor
    • Redwood City, CA
    Replied

    @Bill Zepeda,

    Just keep it simple and do it by mail so everything is in writing and business-like.  Just send a letter by registered mail contains the following:

    name, address, reference to the date of the existing lease, the amount of the increase and new rent amount, the date it goes into effect, and the date by which they must accept or give notice.  

    Do not give a reason for the increase.  They are your tenants, not your buddies and you are running a business. 

    You can increase the rent as much as you like or as much the market will bear as long as there is no rent control.  If they have been there longer than a year you need to give them 60 days notice.  It is a seller's market.  If they don't stay, no big deal.  In our market you'll have the place rented at market price to any number of highly qualified applicants inside of an hour with a Craigslist ad. 

    BiggerPockets logo
    BiggerPockets
    |
    Sponsored
    Find an investor-friendly agent in your market TODAY Get matched with our network of trusted, local, investor friendly agents in under 2 minutes

    User Stats

    214
    Posts
    786
    Votes
    Dave Meyer
    Pro Member
    • Head of Real Estate Investing at BiggerPockets
    • Amsterdam, NL
    786
    Votes |
    214
    Posts
    Dave Meyer
    Pro Member
    • Head of Real Estate Investing at BiggerPockets
    • Amsterdam, NL
    Replied

    Just be direct and to the point. I usually combine the rent increase in an email inquiring about the tenants' interest in staying. Something like: 

    Hi, 

    Seeing that your lease is up in 8 weeks, I wanted to check in to see if you're interested in renewing your lease. You've been a great tenant and I'd love to have you stay. That being said, to keep up with market rates and my own expenses I will be raising rent to $XXXX for the next year. If that works for you, I'll draw up a new lease and we can schedule a time to meet and sign it. Please let me know if you have any questions. 

    User Stats

    5,544
    Posts
    2,363
    Votes
    Jeff B.
    • Buy & Hold Owner
    • Redlands, CA
    2,363
    Votes |
    5,544
    Posts
    Jeff B.
    • Buy & Hold Owner
    • Redlands, CA
    Replied
    Originally posted by @Radhika M.:

    @Jeff B. Thanks for getting back with the info. I just wanted to be sure I did not miss a new change in the law :)

    I already deal with rent control for certain properties in San Jose where I invest so I try to keep up to date on these issues.

    Me too, and I think when we post info that comes to be seen as incorrect, we need to MAN-UP and get corrections noted. We DON't need another facebook level site of FUD(Fear, Uncertainty and Doubt) nor rumors and inaccuracies.

    User Stats

    11
    Posts
    1
    Votes
    Charlie A.
    • Accountant/RE Investor
    • Saipan, MP
    1
    Votes |
    11
    Posts
    Charlie A.
    • Accountant/RE Investor
    • Saipan, MP
    Replied

    A lot of good info here. I'm with Nathan Gesner on this. Good luck, bud!

    User Stats

    91
    Posts
    45
    Votes
    Mary Ann Casey
    • Lafayette, CA
    45
    Votes |
    91
    Posts
    Mary Ann Casey
    • Lafayette, CA
    Replied

    A great topic here!  ...and perfect timing for me, since I need to raise the rent for the first time on some really great tenants and have been struggling with how to do that.  So, I will write a letter and increase rent by approximately 5%. Thank you to those who shared the verbiage they use in their letters!  Very helpful.

    This whole Bigger Pockets thing is terrific! You guys are always come through!

    User Stats

    16
    Posts
    5
    Votes
    Bill Zepeda
    Pro Member
    • Rental Property Investor
    • Brentwood, TN
    5
    Votes |
    16
    Posts
    Bill Zepeda
    Pro Member
    • Rental Property Investor
    • Brentwood, TN
    Replied

    Thanks to everyone for all the great advice.  Update:  I sent my tenant a simple and polite letter that stated the new rent amount (+3%) without any justification, and attached the new lease.  They signed the new lease without any questions.  I plan to continue a straight forward, matter of fact approach and raise rents on an annual basis - just as my property insurance company does.

  • Bill Zepeda
  • User Stats

    570
    Posts
    520
    Votes
    Mike F.
    • Investor
    • Denver, CO
    520
    Votes |
    570
    Posts
    Mike F.
    • Investor
    • Denver, CO
    Replied

    Before the end of every lease we send the tenant a choice of two new leases

    1) 12 month lease 

    2) 24 month lease

    They both have rent increases, the 24 month lease has less of an increase, guess which one everyone signs?